Royal Oak Twp. to pay $90K to retiree with new tax on residents

Debt-ridden Royal Oak Township will tax its property owners an additional $90,000 over the next six years to pay off a former police chief’s retiree health benefits.

The taxes will be levied on winter tax bills starting next year, according to a letter sent last week from the township’s attorney to the county equalization division which oversees tax rolls.

A consent judgment finalized before Oakland County Circuit Judge Colleen O’Brien last month requires the township to collect the money.

The money will go to former Police Chief John Gatewood, 76. He retired in 1999 after township residents voted to disband the town’s police department and contract for police services with the Oakland County Sheriff’s Department.

Township offices are closed on Fridays and Township Supervisor Donna Squalls could not be reached for comment.

The township has been under state review for pension funding issues and failure to comply with a deficit elimination plan. An emergency manager may soon be appointed by the state.

With a deficit of nearly $500,000 so far this year, the township’s red ink equals almost half of its $1.2 million budget, according to financial documents township officials submitted to the state.

Attorney Rodger Webb represented Gatewood in his case against the township.

“Basically the township determined to eliminate retirement medical benefits in 2010” for Gatewood and two other former police officials, Webb said. “We were kind of between a rock and hard place.”

Gatewood’s case – and those of the other two former police officials -- was initially dismissed in circuit court. A state appeals court found Gatewood’s case had some merit and it was returned to circuit court. Webb said he and the township’s attorney reached an agreement before a facilitator that was finalized in county circuit court last month.

“If the state appointed an emergency manager before we had this judgment then it would have been in the manager’s hands,” Webb said.

An emergency manager cannot overturn a court judgment but he can change or void contracts, Webb added.

If the township ends up in bankruptcy Gatewood may never see any money because a judge could then void the judgment, Webb said.

Most of the community’s 2,400 residents are black and nearly a quarter of them live below the poverty line, according to the 2010 U.S. Census. Several township officials have been caught up in corruption charges over the years.

Last year former Township Supervisor William Morgan pleaded guilty to two counts of conspiracy in federal court and admitted to conspiring to accept a $10,000 bribe, defrauding the U.S. Department of Housing and Urban Renewal and making a false statement in violation of the federal Clean Air Act. Morgan admitted taking the bribe in an attempt to steer a HUD demolition contract to the man who gave him the bribe.

While Gatewood was police chief in the late 1990s, his deputy chief, Cecil Dawson, was sentenced to seven years in prison for protecting drug houses in the township.

The Dawson case caused many in the community to vote against continuing with their own police department and in favor of sheriff’s patrols.

After 14 years, the sheriff’s department terminated its contract with the township this month over $300,000 in unpaid police service bills. Sheriff Michael Bouchard said funds from a voter-approved millage to support sheriff patrols weren’t making it to his department.

Michigan State Police began full-time coverage for the township on Friday.

“Residents will not notice much of a change in police service as (state police) were already covering the day and midnight shifts in the township,” said State Police Lt. Michael Shaw in a statement.

State law requires state police to provide services to communities without their own police departments or contracts for service.